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    Essential Information on an Essential Issue

    Letter No.72

    30 January, 1998

    Figures relating to Maori from the 1996 Census

    European Countries experiment with innovative schemes to get long-term unemployed back to work

    Government assurances that all is well with the economy have taken a sharp blow with the release of the latest NZES registered unemployment figures. The string of lay-offs and factory closures announced late last year are now starting to show up in the official figures.

    The number of registered unemployed in December jumped nearly 14,000 people on the previous month, to a new total of 187,153 people. This is an 8% rise from November and a 12.6% rise on December 1996.

    Employment Minister Peter McCardle concedes the increase is larger than the usual seasonal boost caused by students and trainees finishing their courses and signing on the dole. But he points to the introduction of work-testing for domestic purpose beneficiaries and the spouses of people on unemployment benefits, as reasons contributing to the rise.

  • Numbers of people on employment programmes, including Community Taskforce, were at 7,742 people in December, compared with 5,233 people a year ago. There were 59 registered unemployed people for every notified vacancy at NZES in December. 60% of the notified vacancies were still unfilled by the end of the month. Sources --
    Figures faxed to the Jobs Letter from NZES; New Zealand Herald 28 January 1998 "Jump in jobless blow to Govt" by John Armstrong
    1998 will be the year of the debate on social responsibility. The government is determined that its code of social responsibility will radically change the direction of social policy for decades to come. Social Welfare Minister Roger Sowry has begun the year by pitching the code as being as significant as the establishment of the welfare state by the Labour Government in the 1930s. He likens the code to the Bill of Rights, saying that once it is introduced, people will be loathe to change it.

  • What is so radical in this new code? Sowry says it will take the focus of social policy "...away from rights and looking at responsibilities for the first time." Sowry believes the NZ code will "lead the world in social policy" -- pointing to Britain as the only other country beginning to focus on responsibilities in its reconstruction of welfare systems.

  • The Coalition government's enthusiasm for the concepts of social responsibility has already taken over the framework of its employment policies. Last month, Sowry and Employment Minister Peter McCardle announced the merger of the NZ Employment Service and the Income Support agency, as part of what they say is "the most far reaching reform of employment policy in NZ history...". The implications of the Christmas Eve announcements are now starting to hit home with community groups after their summer break. A common concern: Will the "social responsibility" focus of the new super-agency take precedence over its "employment" objectives?

  • The debate will be focused over the next two months in three main areas. Firstly, community and church groups, activists and academics will be gathering at Auckland's Massey University Campus (12-15 February) to look at the code and related issues of work-for-the-dole schemes, welfare reform and housing, health, employment and poverty issues.

    Secondly, The Prime Minister's annual statement to be delivered in parliament on February 17 will have a substantial portion devoted to explaining Jenny Shipley's thinking on the social responsibility agenda, and the work-for-the-dole scheme. Thirdly, the government is to issue a discussion paper on its proposed code, which will be made public by the end of March. They are hoping for lively public debate and "consultation" to follow.

  • What is in the code? Sowry isn't saying yet. Our Media Watch reports that suggestions from different government ministers have included requiring parents to ensure their children are not truant from school, and to attend parenting courses if their children are in trouble with the law, directing those not coping on benefits to take budgeting advice, ensuring the unemployed are available for work, and requiring them to undertake training or community work.

    Sowry is quick to scuttle suggestions that the code will be proscriptive or punishment-driven. He wants to "disentangle" the code from scare stories about benefit cutting or tougher work-testing of beneficiaries -- issues which he says the government is addressing on "a different track".

  • Sowry says he has "an open mind" as to even whether the code will be legislated into law. His view is that the code is about principles, and will underpin other social policy initiatives, in much the same way that the Fiscal Responsibility Act sets the framework for constructing economic policies. He sees the code as putting "pegs in the ground" providing governments with parameters against which future policies across the welfare, employment, health and education portfolios will be required to measure up to.

  • John Armstrong, political correspondent for the New Zealand Herald says that cabinet ministers have returned from their holidays enthusiastic to turn public attention towards "social issues'. He says that unlike the debate on compulsory superannuation -- the main social policy debate of 1997 -- the debate on social responsibilities is something that unites the coalition parties, rather than divides it.

    Armstrong: "The coalition has set itself the ambitious task of trying to prod the country into a debate about welfare reform -- a debate for which the country displays no obvious appetite. The "modernising" of the welfare state -- more particularly, people's attitudes to what the state should be expected to deliver -- is the cabinet's prime policy thrust for 1998..."

  • The welfare reform debate last year was focussed around the theme of "Beyond Dependency" and the government brought several overseas experts from America, particularly from Wisconsin, to provoke debate on its radical proposals. This year, all eyes will be on Britain.

  • The British Labour Party has traditionally been the defender of a system of cradle-to-grave welfare designed to prevent people from falling into poverty, and has supported universal payments to the old, sick and infirm, regardless of their wealth. But PM Tony Blair now plans to concentrate welfare payments on those who need them most, and plans to introduce measures which mean the end of universal benefits and the introduction of greater means-testing. The Labour Party has launched its first "welfare roadshow" as part of its crusade to change the nature of the British welfare state.

    Blair says the welfare state has become a dead-end for too many people despite the ever-increasing amount of cash poured into it. Writing in The Times, Blair says that "those in genuine need will always be helped and supported by a Labour Government". But, he adds: "...anyone of working age who can work should work. Work, for those that can work, is in our view the best form of welfare..."

    Tony Blair appears undeterred by a left-wing revolt over his welfare reform plans: "This government will listen. But let nobody underestimate my determination to see this through..."

  • The British welfare reform plans include cuts which will reap the government 3.2 billion in savings by 2001. These include cuts to benefits to disabled people, abolition of industrial injuries benefits, means-testing of disability benefits, tougher measures to get people off benefits and into work, a cap on maternity pay, and restricting pensions to the most needy elderly.

    High on the British agenda is also the introduction of a "working family tax credit" similar to that introduced in NZ last year, under which low-income families will be paid benefits through their pay packets rather than receiving cheques at home.

  • VOICE:
    "What is worrying is the way that Labour exaggerates the cost of the welfare system, exaggerates fraud, and exaggerates the savings that welfare-to-work will make [...] Yes, society has moved on since the Beveridge report: more women in work, more marital break-ups, more job switching, and more people living longer. Social security spending has increased eightfold in real terms in the past 50 years, yet the proportion living in poverty continues to climb. But the reports ignore the brutal widening of inequality in the past two decades and fail to spotlight the degree to which benefits fall short of people's needs..."
    -- editorial in the Guardian Weekly 25 January 1998
    Source -- The Dominion 14 January 1998 "Code of Social Responsibility 'radical'" by Helen Bain; New Zealand Herald 24 January 1998 "Welfare Reform cabinet's main thrust" by John Armstrong; The Dominion 27 January 1998 "End to benefit trap sought" by Mark Henderson of The Times; Reuters 15 January 1998 "Blair Pledges Big British Welfare Reform"; BBC News 15 January 1998 "Blair's case for Welfare reform" and "Social Security Factfile" on
    Radio NZ last week reported that about 200 public servants from NZES and Income Support could lose their jobs in the coming merger into an as-yet-un-named super-agency. It based this report on documents obtained by National Radio under the Official Information Act which said that about 200 staff will be made redundant in the restructuring which is expected to deliver savings of $74m within five years.

    The official word: Secretary of Labour John Chetwin says the figures were used in an assumption as part of the costing options prepared for ministers on the merger. But it may bear no relationship to the real outcome, as any redundancy decisions will not be made until a chief executive is appointed and staffing needs are assessed.

    Source -- The Daily News 29 January 1998 "Welfare Boss: No redundancy decision" by NZPA

    Trade Minister Lockwood Smith is continuing his campaign to answer the critics of the Multilateral Agreement on Investment, which he intends signing. He says that up to $100 billion in new investment will be needed in NZ over the next decade to maintain economic and job growth. This, he says, is an amount clearly beyond the savings of fewer than 4 million NZ'ers. Smith: "Without foreign investment, it is unlikely the extra money needed to create significantly more jobs and exports can be raised..."

    Dr Smith points to forestry as one area in need of substantial investment. The radiata pine harvest is expected to increase from about 17m cubic metres last year to nearly 30m cubic metres by 2007. Smith: "This gives NZ a choice. We could ship that timber off as logs ... or we could invest between $4.5 and $6.5 billion in wood processing and potentially create up to 30,000 new jobs and $5 billion in extra export receipts per annum."

    Source -- The Dominion 21 January 1998 "NZ needs $100b in next decade - Smith" by NZPA

    The Education and Training Support Agency (ETSA) is being taken to the Human Rights Commission by Nelson's Amaltal Fishing company which is complaining about special payments aimed at helping Maori fishing students into employment. The company decided to lay the complaint, under the Human Rights and Race relations Acts, after hearing that ETSA had offered the Westport Deep Sea Fishing School $450 for each Maori trainee it placed in work. The school rejected the offer.

    Amaltal's general manager Ken Atkinson says the ETSA practice is "grossly unfair" and was neither necessary nor desirable. He says the special payments could have resulted in unfair treatment of other trainees because of the added incentive for the school to place trainees of Maori background. ETSA says it will not comment until the Human Rights Commission formally advised it of a complaint.

    Source -- The Dominion 12 January 1998 "Maori student incentive angers fishing company"

    The NZ Navy continues to suffer from dramatic skills shortages. Navy chief rear Admiral Fred Wilson says that the Navy is so short of trained staff that in some trades there are fewer than 10 people to cover the whole navy, and barely enough for one ship. He puts the blame on private industry which was siphoning off the Navy's trained people. The Navy is shortly to begin an accelerated training programme to boost staff numbers, and is designating the ship Wellington as a training ship.
    Source -- The Dominion 20 January 1998 "Navy boosts training amid trade skills shortage" by Cathie Bell.

    Almost one in three immigrants to NZ from the Middle East is out of work. The 1996 census shows that 1,107 or 30% of the labour force of 3,702 people of Middle eastern origin (over the age of 15) are unemployed. Also hard hit by lack of work are Tokelauans, Sri Lankans, Koreans and Vietnamese.

    The Immigration department says the immigrants face two main hurdles: many qualifications from other countries are unrecognised here in NZ; and there is not enough government funding for English language teaching for new immigrants.

    Peter Cotton, a director of the Refugee and Migrant Service, says that the government is doing "an appalling job" when it comes to teaching English. Cotton: "If the government cannot see it has a moral responsibility to ensure enough language teaching, then it should at least see the economic argument that the longer people are unemployed, the more it costs Income Support..."

    Source -- New Zealand Herald 27 January 1998 "Doleful migrants in jobless bind"

    Internet Bookmark: Are you obsessed with your job? The other face of unemployment and poverty is the growth of overwork and obsession with work amongst the employed. This ABC News internet site at examines the quality of working life in America. ABC journalists take a look at longer work-days, shorter vacations, the two-income time crunch, declining real wages and latch-key kids, and ask: Does it all add up to being overworked, underpaid, and pressed for time? Has work taken over our lives? How do we find time in the 1990s for families and friends? This website is worth visiting if only for a glimpse at the latest face of corporate internet/magazine journalism -- complete with interactive polls, statistics, email comments, and audio features.
    Source -- ABC News at

    "We can't get away from the Economy. To set aside the profit motive, the desire to possess, the ideals of a fair wage and economic justice, the bitterness over taxation, the fantasies of inflation and depression, the appeal of saving, to ignore the psychopathologies of dealing, collecting, consuming, selling and working, and yet to pretend to grasp the interior life of persons in our society would be like analysing the peasants, craftsmen, ladies and nobles of medieval society all the while ignoring Christian theology, as if it were an inconsequential occurrence.

    "Economics is our contemporary theology, regardless of how we spend Sunday. Economics is the only effective syncretistic cult remaining in the world today, our world's only ecumenical faith. It provides the daily ritual, uniting Christian, Hindu, Mormon, atheist, Buddhist, Muslim, Jew, fundamentalist and New Ager in the common temple, admitting all alike [...]

    "The Economy differs from all other world empires, depending neither on Roman legions nor on British battleships, secret police, or stockpiles of nuclear weapons. Its power, like that of religions, has become interiorised. It rules by psychological means. The Economy determines who is included and who is marginalised, distributing the rewards and punishments of wealth and poverty, advantage and disadvantage.

    "Because this internatisation of its ideas is so unquestioningly and universally accepted, it is the Economy where the contemporary unconscious resides and where psychological analysis is most needed. Our personal lives are no longer the place of unconsciousness every therapy session, recovery group and family counseling, every afternoon talk show and soap opera have opened wide the closets of private passions and pains. The unconscious is exactly what the word says: what is least conscious because it is most usual, most familiar, most everyday. That is the daily round of business. That is the daily round of the Economy... "

    James Hillman, "Kinds of Power: A Guide to Its Intelligent Uses" (Currency Doubleday)

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